U.S. Stocks Rise as S&P 500 Extends Record Amid Jobs Data

April 2 (Bloomberg) -- U.S. stocks rose a fourth day, with
the Standard & Poor’s 500 Index extending a record, as data
showing companies added to payrolls last month fueled optimism
on growth in the economy.

Intuitive Surgical Inc. rose 5 percent to a 14-month high
after JMP Securities LLC upgraded the stock’s rating. MannKind
Corp. jumped 74 percent after its inhaled treatment for diabetes
won the recommendation of a U.S. advisory panel. Apollo
Education Group Inc. slipped 8.8 percent after it received a
subpoena from the Education Department for marketing and
recruitment records.

The S&P 500 rose 0.3 percent to a record 1,890.90 at 4 p.m.
in New York. The Dow Jones Industrial Average rose 40.39 points,
or 0.2 percent, to 16,573, within four points of its all-time
high set Dec. 31. The gauge briefly erased its loss for the
year. About 6.2 billion shares changed hands on U.S. exchanges,
9.7 percent less than the three-month average.

“The positive tone from yesterday is most likely to
continue into the jobs report, absent some big macro piece of
data that comes out between now and then,” Michael James, a Los
Angeles-based managing director of equity trading at Wedbush
Securities Inc., said in a phone interview. “Longer-term
investors are still of the opinion that the U.S. equity market
remains one of the best places to be invested for this year.”

The S&P 500 rose 0.7 percent yesterday to cap a third day
of gains, the longest streak since February, as consumer and
technology stocks pushed the gauge to a record and an index of
manufacturing boosted optimism the economy withstood severe
winter weather.

The equities benchmark trades at 17.5 times reported
earnings, the highest level since 2010 and 11 percent above its
five-year average, according to data compiled by Bloomberg.

Data Watch

Data today showed February factory goods orders rose 1.6
percent, topping an estimated advance of 1.2 percent. A separate
report indicated companies in the U.S. boosted payrolls by
191,000 in March, according to figures from the ADP Research
Institute in Roseland, New Jersey. The median forecast of 38
economists surveyed by Bloomberg called for a 195,000 advance.

The government’s monthly jobs numbers for March are due
April 4.

Reports from hiring to factory output had shown weakness
this year as freezing temperatures and mountains of snow kept
shoppers indoors, grounded flights and made it harder for
shippers to fill product orders.

Fed Chair Janet Yellen said last week that “considerable
slack” in the labor market is evidence that the central bank’s
unprecedented accommodation will be needed for “some time” to
put Americans back to work.

Investors also watched comments from Fed officials today to
gauge the timing and pace of further cuts to stimulus.

Economic Slack

Fed Bank of St. Louis President James Bullard said in a
Bloomberg Radio interview that a further slowing of inflation
could prompt policy makers to suspend tapering of bond
purchases, though he doesn’t expect that to happen.

Fed policy should remain accommodative “for quite some
time” given “considerable amount” of economic slack that
remains, Atlanta Fed President Dennis Lockhart said in a speech
in Miami.

The central bank has cut $10 billion from its monthly bond
buying in each of its past three meetings, leaving the total at
$55 billion.

The Fed stimulus has helped propel the S&P 500 higher by as
much as 180 percent from its bear-market low in March 2009. The
equity gauge climbed 1.3 percent in the first three months of
2014, its fifth consecutive quarterly advance.

Sweet Spot

“Growth appears not too strong to feed the Fed’s hawks but
neither too slow to question the recovery, re-emphasizing the
sweet-spot concept -- which should be the most favorable
environment for risky assets in 2014,” Witold Bahrke, who helps
oversee $55 billion as a senior strategist at PFA Asset
Management in Copenhagen, wrote in an e-mail.

Investors have removed $3.7 billion from U.S. equity
exchange-traded funds in the past five days and added $1.3
billion to bond ETFs, data compiled by Bloomberg show. Financial
stocks saw the most money removed among industry ETFs, losing
$489.2 million during the past week.

The Chicago Board Options Exchange Volatility Index, a
gauge for U.S. stock volatility known as VIX, fell 0.1 percent
to 13.09 for its fifth straight loss and the lowest level since
January.

Eight of the 10 main S&P 500 industries advanced today.
Consumer-discretionary stocks added 0.7 percent, for a fourth
day of gains after a five-day losing streak.

Da Vinci

Intuitive Surgical Inc. rose 5 percent to $518.50, the
highest since March 2013. The stock jumped 13 percent yesterday
as the Food and Drug Administration cleared a major upgrade of
the company’s da Vinci robotic surgery system. JMP Securities
LLC upgraded its rating today to market outperform from market
underperform.

MannKind surged 74 percent to $6.99. The biopharmaceutical
company moved a step closer to getting its first product on the
market after Food and Drug Administration advisers recommended
that the FDA approve its Adfrezza drug for treating Type 1 and
Type 2 diabetes. The agency doesn’t have to follow the panel’s
recommendation.

Apollo Education slipped 8.8 percent to $32.06. The owner
of the University of Phoenix said the department’s Office of the
Inspector General demanded records going back to the beginning
of 2007 relating to a centralized service center in Columbia,
Maryland.

Alcoa Inc. slipped 1.5 percent to $12.85 after an analyst
at Nomura Holdings Inc. said the stock’s recent outperformance
is “unwarranted” and that there is “significant” downside
risk to 2014 earnings per share. Cowen & Co. also said the stock
is overvalued. Alcoa jumped 9.6 percent in March.